\u201cWe\u2019ve got frankly one of the largest toy retailers in the country that sold more than 12,000 potentially dangerous products into the market over a period of two years, all because of an error of judgment.\u201c<\/p>\n
He queried how contrite the retailer really was.<\/p>\n
\u201cIn many respects, The Warehouse doesn\u2019t think it\u2019s done much wrong at all.\u201d<\/p>\n
Barry said the case was about small parts which could have or should have been removed from the product.<\/p>\n
But Judge Simon Lance said the product packaging did advise shoppers of a choking hazard.<\/p>\n
He said the product also warned: \u201cSmall parts not for children under 3 years.\u201d<\/p>\n
\u201cIt\u2019s not on the outside of the box,\u201d Barry said.<\/p>\n
The packaging had a picture of a child clearly younger than 3, Barry said.<\/p>\n
A product safety recall was issued for the Roo Crew take-apart vehicle.<\/p>\n
He said the commission viewed the breach as obvious and the offending happened from 2021 to 2023.<\/p>\n
The commission previously said firms could not dodge fair-trading obligations by labelling toys \u201cfor children over 3\u2033 if the toy was designed or marketed for younger children to use.<\/p>\n
Barry said one person at The Warehouse buying the product made a bad call, which went undetected.<\/p>\n
\u201cFor a company the size of The Warehouse, that\u2019s actually not good enough.\u201d<\/p>\n
He said a fine should be about two-thirds of the maximum penalty, which for companies was $600,000 per charge.<\/p>\n
Barry said there were nine charges. So by his reckoning, The Warehouse should be penalised about $3.6 million.<\/p>\n
If a hefty penalty was not imposed for such a big trader, there was little chance anyone in New Zealand would be substantially fined for such offending, he said.<\/p>\n
Comparable cases?<\/p>\n
In February this year, Bed Bath & Beyond was fined $230,000<\/a> after selling non-compliant children\u2019s pyjamas and hot water bottles.<\/p>\n That included 3753 children\u2019s pyjama sets without fire hazard information in the required spot.<\/p>\n There was a \u201cbig gulf\u201d between Bed Bath & Beyond\u2019s New Zealand revenue and that of The Warehouse, Barry said.<\/p>\n In 2023, NZME was fined $195,000<\/a> because a child needed surgery after swallowing magnets in a \u201cbuckyball\u201d toy sold on GrabOne.<\/p>\n GrabOne is no longer part of NZME<\/a>.<\/p>\n The Warehouse offended for much longer and sold far more products than the roughly 200 toys sold in the GrabOne case, Barry said.<\/p>\n Steel & Tube was fined $1.56m<\/a> in 2020 for misleading conduct over \u201cseismic grade\u201d steel mesh products known as SE62 mesh.<\/p>\n In that case, Steel & Tube admitted 24 charges.<\/p>\n And in 2009, The Warehouse was fined $209,600 for misleading consumers about the advertised price of goods, using bait advertising and false labelling on some duvets.<\/p>\n \u2018Mud thrown\u2019<\/p>\n John Dixon KC, acting for The Warehouse, today said the retailer had good systems. <\/p>\n \u201cThere\u2019s been a little bit of mud thrown at The Warehouse,\u201d he told Judge Lance.<\/p>\n \u201cAnd I\u2019m going to try and get the hose out and clean that off.\u201d<\/p>\n He acknowledged the large number of Roo Crew goods sold.<\/p>\n But he added: \u201cIn this case, there is no actual harm.\u201d<\/p>\n He said the conduct was inadvertent, rather than careless.<\/p>\n Dixon said the court should not ignore prominent warnings on the Roo Crew toys and what those warnings conveyed.<\/p>\n \u201cWhere The Warehouse fell down is they didn\u2019t appreciate the impression conveyed by the photograph.\u201d<\/p>\n He said there was no relevant prior offending and the duvet case was 16 years ago and not comparable to the toy car case.<\/p>\n Dixon also said The Warehouse should not be punished heavily because it had more revenue than companies in the other cases.<\/p>\n The retail group in the year to August 3 reported a net loss after tax of $2.76m<\/a> from revenue of $3.09 billion.<\/p>\n Judge Lance reserved his judgment, meaning he will issue his decision on the case at a date yet to be confirmed.<\/p>\n